Reduce Risk. Reduce Cost. Raise Savings!

by Luke Kenny, Chief Executive Officer

Councils are still failing to declare when they are purchasing under an LGP contract. Many people we are meeting within councils across NSW are telling us they “think” they are purchasing through our contracts. When we ask how they are ensuring
they are doing so….we find in fact they are not.

If you fail to declare what contract you are purchasing under, this means your council has failed to trigger pricing, protective terms and conditions. Most importantly, when that spend is over $150,000 you are risking your council’s compliance to legislation.

Here are some further implications, outside of legislative non-compliance, if you don’t nominate to the supplier that you are purchasing under an LGP contract:

Your council spend reported by suppliers will not be captured in our new LGP Contract Spend Dashboard.

LGP cannot collect the associated Management Fee related to your reported contract spend, leaving less for us to re-invest back into business improvement or pay in rebates back to councils.

Finally, if you don’t nominate a contract, your
council can therefore be found to breach legislation and regulation, as well as buying without the protection of any terms and conditions.

The final point above is rarely spoken about, even by us here at LGP.

Simply put, if you have no evidence, or you fail to declare to the supplier that you are making a purchase under an LGP contract, and that purchase is over $150,000, you are in breach of Local Government legislation and regulation by failing to go to tender for that purchase.

If you have a dispute in relation to that purchase, your
council is not covered by LGP terms and conditions. Your council will have to resource, fund and fight any action to resolve that dispute with a supplier, without being able to rely on LGP’s support.

For all those people who are unsure, or “think” they are using LGP, here are various ways you can use to make sure you are in fact purchasing under an LGP contract:

Complete a Notice of Participation Form covering all your preferred LGP contracts

Conduct an electronic Request For Quote (eRFQ) in VendorPanel against an LGP panel contract

State the LGP Contract Name and Number on your Purchase Order issued to a supplier

Document that you are purchasing under the stated LGP Contract Name and Number on your Request for Quotation

Code suppliers in your finance system that they are being engaged under the LGP contract

If you do one, or all of these steps you can be confident that your council is purchasing under the safety of the LGP contract. By doing so, this means your council can benefit by:

Managing Procurement Risk - using contracts complying with all requirements of the Local Government Act 1993 (NSW) and the Local Government (General) Regulation 2005 (NSW).

Significant time savings because LGP has done the tendering, so that you don’t have to, and if there is an issue or
dispute, LGP will manage that process on your behalf.

Financial benefit through aggregated price discounts, LGP rebates are paid against your spend under contract, integrating your data into our LGP Savings Calculator being released later this year.

If you need help in taking the steps to make sure you are protecting your council by purchasing under an LGP contract, please work with your regional LGP Business Development Manager.

While I am on how to make sure you are using LGP contracts, we have had a terrific response
to the new LGP Contract Spend Dashboardreleased a couple of weeks ago. For those who have not yet opened the report, or decided how to use the report please feel free to contact your regional Business Development Manager for some help. If you would like more data, we have other reports available on request, otherwise you can look forward to our next report being issued in late May.

Finally, the 2018 Networking in the Bush event program has begun with our opening event being held for the first ever in Coffs Harbour. With over 17 councils represented by close to 50 people the event was a great success supported by speakers from Coffs Harbour City Council, LGP,
Prevention Partners, VendorPanel and the NSW Audit Office. We recently delivered our Dubbo event. Looking ahead, on the 5th of April we are in Sydney for our Network Meeting, 24th May we are in Wagga Wagga, and then we are back in Sydney on 9th August. Please visit our website to register, we would love to see you there.

Thank you!

New Contract Launched

Solar Power Purchase Agreement

Nothing stays the same at LGP and we are always looking for ways to improve our service offering to our customers. This month, LGP launched a new service of rooftop Solar Power Purchase Agreement (PPA). This commenced on the 1st March 2018.

What is PPA I hear you ask?

PPA is an arrangement in which a solar service provider designs, builds, owns, operates, monitors, and maintains a photovoltaic (PV) system. You, the customer, agree to site the system on your rooftop or elsewhere on your property and to purchase the system's electric output from the solar services provider for a predetermined period and price.

These arrangements enable a customer to avoid many of the traditional barriers to the installation of solar systems.

A few benefits of a Solar PPA are:

No upfront capital cost,

Predictable energy pricing,

Offsets some, or all, of a premises electricity consumption from the grid,

No system performance or operating risk – you are still connected to the grid.

PPAs are commonly provided by companies specialised in solar systems design, development and installation and
they will install a meter to measure the output of the system.

So take the next step to see how solar PPAs may be utilised within your organisation to reduce energy costs and lead the charge on carbon. Ask your friendly Business Development Manager for further information, or contact Peter Flood, Category Manager - Utilities via email.

'Networking Meeting' - Sydney

Registration Now Open!

LGP would like to extend an invitation to all NSW council staff to attend the upcoming 'Networking meeting' in Sydney on Thursday
5th April.

The event aims to further build the capability of procurement in NSW local government. This year we promise to deliver another exciting and informative program covering off on current topics and issues.

This event is free of charge to the local government community and is a great opportunity to network with your peers, gain awareness and knowledge of topics covered and for ongoing professional development. The agenda will be out shortly, however the highlights of the day are as follows:

Sustainable Choice Forums

Registrations Now Open!

Sustainable Choice would like to invite council staff involved in procurement and sustainability to attend the upcoming Sustainable Procurement Forums.

One of the many services offered by Sustainable Choice are the Annual Sustainable Procurement Forums. These forums are a great opportunity to learn more about sustainable procurement, network with your peers and gain knowledge through presentations and case studies on sustainable procurement.

There will also be a number of suppliers at the forums to showcase technology and innovation in sustainable products.

The 2018 forums are an opportunity to discover ways to implement sustainable procurement effectively within your organisation; with a focus on resources and tools, case studies, electric vehicles and charging stations, sustainability in tenders and social enterprise.

For more information, please call the Sustainable Choice team on 02 8270 8703 or email.

Sponsorship Opportunities

Local Government Procurement
Annual Conference 2018

The Local Government Procurement Conference is an established industry event for NSW local government. The conference provides a unique opportunity for suppliers to showcase their goods and services to a cross section of procurement professionals from across the state over two days. It is also an excellent opportunity to attract potential customers and build on existing relationships already established.

The conference will be held on Thursday 18 October and Friday 19 October 2018 at Doltone House, Darling Island Wharf, Pyrmont Point.

Sponsorship Sold

Sponsorship Opportunities Available

Sponsorship opportunities are limited. Suppliers who wish to participate as a sponsor or as a trade exhibitor can view our Sponsorship Prospectus.

Simple is Often Best

by Tenders and Contracts Team​

Some procurement staff may not be aware of the recently released Local Government Capability Framework. This framework includes Procurement and Contracts. The Capability Framework has come about because local
government expressed a strong desire for capabilities on performance and behaviour.

The framework was developed by LGNSW and covers desired behaviours & attitudes. NSW councils can choose whether to use the framework or not. The important thing for those of us in procurement to know is that it describes the core knowledge, skills, abilities and other attributes expected in a range of areas including procurement and contract. Levels covered include Foundational, Intermediate, Adept, Advanced and Highly Advanced. The information may assist you in developing your procurement team and in drafting job descriptions and work plans.

At the Commonwealth level, the Attorney-General’s Department has released a public consultation paper titled Modern Slavery in Supply Chains Reporting Requirement. The intention is that business will in the future, be required to monitor its supply chains for evidence of slavery situations and to publish a ‘modern slavery statement’ annually. Presumably some form of audit will be required. Some public companies are already making related statements in their annual reports. The proposed revenue
threshold for reporting is expected to be set no lower than $100 million of total annual revenue. The Australian Government is considering ways to demonstrate leadership including consideration of a procurement connected policy on human rights. State Government is also considering its options in this regard. Conceivably local government may be affected in due course.

Enhance productivity and become more compliant in procurement processes by
up-skilling and acquiring new skills and competencies.

LGP Training would like to continue its pursuit to support in developing your knowledge and skills in procurement and contracting space during 2018. We are equipped to cater to your varied procurement training requirements through the following four suites. More details in the links below:

eLearning: You can control your learning through this choice that we deliver using a state-of-the-art technology. Currently, the following three modules are on
offer:

Procurement Essentials

Contact Management

Probity in Procurement

Public
Courses: These face-to-face training units are delivered at our LGP office based in Sydney CBD. We provide a range of interactive and leading practice modules comprising of the following critical areas of procurement and contract management:

Procurement for Local Government

Contract Management Essentials

Advanced Contract Management

Supplier Tender Training

ISO 20400 Training

Planning and Specifications

Spend Analysis for Savings, Efficiencies, Compliance & Collaboration

Evaluation, Supplier Selection and Contract Establishment

Social Procurement and Economic Development

Project Management Essentials

Customised On-site Training: LGP Training can reach out to your premises and deliver any of the above-listed modules. If needed, the contents can be contextualised with client specific case studies, templates, policies & procedures for better expected outcomes in a more cost effective
way.

Upcoming Training Sessions

Procurement for Local Government - One day face-to-face training

This one day course provides a comprehensive overview of the purchasing function within the NSW local government sector. The participants get to learn the end to end procurement life-cycle and practical ways to apply principals within this sector.

This course is relevant
for any staff involved in purchasing activities in a local government context.

This is a full day course designed to provide participants with an understanding of ISO 20400 on sustainable procurement and how it can be used in their own context and professional role.

This course covers how to analyse a council’s current sustainable procurement framework, identify drivers for sustainable procurement and define a sustainable procurement strategy and program of work that is tailored to your
council’s context.

This course is targeted at: procurement management, management staff in charge of environmental, social and economic issues, management in finance, legal, HR, engineers and operations.

Banking and Bill Payment Services

There is no legislative requirement to run a tender process for banking services in NSW*.

So what is the imperative to ‘test the market’ when there is no legislative compulsion to do so? Since the privatisation of banks, the local government sector has had the perfect opportunity to ‘test the market’ and access much more competitive rates and value for money. Very few councils have pursued this opportunity through a public tendering process. LGP believes the expenditure for Banking and Bill Payment services for almost all of the 128 councils over the term of the current
contracts would easily surpass the tender threshold of $150,000.

Does your council’s procurement policy include or exclude Banking and Bill Payment services? Are you aware of what your annual contract spend is on these services? Do you know how long your council has been banking with the same bank? Could it be 5 years or 10 years without the contract being reviewed? One large regional council has been with the same bank for over 100 years! Is this good practice?

LGP Consulting Team

LGP extends its expertise and experience to provide councils with an additional service through its Consulting Team.

LGP’s Consulting Team are well positioned to facilitate end to end tender processes on behalf of individual councils. Our Consulting Team comprises highly qualified and experienced professionals who have
demonstrated success in facilitating tenders on behalf of councils.

Examples of recent tenders we have conducted on behalf of individual councils are:

Refurbishment of Library Building

Legal Services Panel – two individual council
tenders

Internal Audit Services

Natural Resources Services

Management and Operation of Swimming Centre

Security Services - two individual
council tenders

Food and Garden Organic Processing

Scrap Ferrous Metals, Green Waste Processing, Crushing and Screening of Concrete and Waste Bin Audit (4 separate tenders for a group of councils)

Leading Efficiency & Analytics Program - LEAP

We are pleased to inform you that the LEAP program has now been successfully rolled out to five councils, with more councils expected to sign up shortly. Councils such as Inner West, Armidale and others are now able to demonstrate the effectiveness of their current procurement programs and show the plans and savings they have made.

If you would like more information about
the program, please email us or visit our website.

The LEAP program is delivered to councils by LGP in association with ArcBlue.

Current Tenders

For information regarding Local Government Procurement tenders, including current status, click here.

Current Contracts

Findout what current contracts are available at Local Government Procurement here.

Upcoming Tenders

To find out about upcoming tenders at Local Government Procurement, click here.

ContractsAmendments

To find out information about amendments that have occurred between Local Government Procurement and Approved Contractors, clickhere.

Want to Know who Your Business Development Manager is at LGP?

Local Government Procurement has a dedicated team to look after the needs of councils, approved contractors, not for profit organisations and other government bodies.

Sustainable Choice - The Sustainable Approach to Procurement in Local Government

Sustainable Choice assists local government to integrate sustainability into their procurement systems and purchase sustainable products and services. Every purchase counts and Sustainable Choice can make it easier; it’s the responsible and sensible approach to procurement.

Find out more about Sustainable Choice, its products and servicesclick here.

Update - 'Networking in the Bush' - Coffs Harbour

The first networking meeting for 2018 was held in Coffs Harbour on the 22nd February, 2018 at the Cex Club. The day was a tremendous success attended by staff from Coffs Harbour and 17 surrounding councils within the region.

The General Manager of Coffs Harbour City Council, Steve McGrath, officially opened the event and the agenda for the day was well received and
full of current topics.

This year LGP has partnered with the NSW Audit Office and was very pleased to hear them present to the group on the findings from the 2017 audits. Discussions were held on the latest procurement issues in the contract and legal space held by Phill Scott (Head of Tendering and Contracts – LGP) and Monica Kelly (Principal - Prevention Partners). We also heard from Sustainable Choice on the new ISO 20400 for Sustainable Procurement and Vendorpanel on their Local Supplier Engagement Tool.

In addition, we heard from our 2018 Networking Meeting Sponsor, Boral, who provided the group with an informative briefing on the storage and
handling of bitumen emulsion. The day was wrapped up with a Q&A panel session, where questions from the group were discussed and various viewpoints put forward.

A great day was had by all, discussions were robust with excellent networking providing an
opportunity for collaboration and sharing of information which was pivotal to the success of the day. It is with great pleasure that LGP is able to share some of the delegate feedback from the day, truly acknowledging that this is an extremely valuable and much needed event in local government.

“a very informative event”

“interesting and worthwhile”

“valuable and
really inspiring”

“very well executed by a very knowledgeable team”

On behalf of LGP, I would like to thank all those that attended for contributing to a successful day and I look forward to facilitating future networking events in Northern NSW.

For information, the metro networking meeting will be held in Sydney on Thursday 5th April, followed by another regional event in Wagga Wagga on Thursday 24th May. For further information, please visit the LGP website.

Jessica Jones
Business Development Manager, Northern NSW

How Much Insurance is Enough?

Frequently, my council clients ponder whether the insurance they require from their contractors is sufficient, both in value and form. In considering this we all understand and appreciate the place that well-drafted policy holds, which begs the two following questions:

Are the values of insurances required from your contractors, contained within your relevant policy, suitable; and

Is the policy flexible enough to satisfactorily deal
with deviations from it?

This brief article considers the issue of insurance coverage and asserts that there is no hard and fast rule regarding coverage amounts or even what coverage to ask for. In this article you are encouraged to identify and consider the relevant factors and make informed decisions on a case-by-case basis.

After undertaking the analysis recommended here you will be in a position to know with a degree of assurance which risks you need protection from and how much protection you need.

Message to take away

Understand your risks and how these can be mitigated.

Understand what the insurance policies offer, not just what they are called.

It is best practice to have a policy that is flexible enough to accommodate the risks associated with contracts, not just a box-ticking exercise.

Undertaking risk assessments for the project your council is contracting out will help you decide what types and how much coverage you need.

If there is any topic you would like covered next month, please feel free to contact Prevention Partners NSW to make suggestions.

VendorPanel Multi-Party Evaluation... It’s Coming!

The new VendorPanel Multi-Party Evaluation module helps simplify the process of collecting and making sense of evaluations from independent evaluators. The module sits at the end of the VendorPanel sourcing process and it automates the aggregation of scores which allows you to easily manage a consensus decision process. It also automatically creates a Value-for-Money chart (below) which provides a visualisation of the Vendors responses and alerts the buyer to the vendor efficiency frontier. Vendors on the frontier represent better performance and/or lower cost and should therefore be your first pick.

The application has been developed in partnership with 1000minds, the world’s leading developer of Multi Criteria Decision Making (MCDM) tools. The team at 1000minds are leaders in the field of MCDM having published research in this field of expertise.

The new feature will be released in March. We will be scheduling Webinars for our upgraded VendorPanel clients in the coming weeks to show the new module.

Click here if you would like to schedule a demo or find out more about Multi-Party Evaluation and VendorPanel in your Council.